U-Haul 2008 Annual Report Download - page 15

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We seek to effectively hedge against interest rate changes in our variable debt.
In certain instances the Company seeks to manage its exposure to interest rate risk through the use of hedging
instruments including interest rate swap agreements, interest rate cap agreements and forward swaps. The Company
enters into these arrangements with counterparties that are significant financial institutions with whom we generally
have other financial arrangements. We are exposed to credit risk should these counterparties not be able to perform
on their obligations. Additionally, a failure on our part to effectively hedge against interest rate changes may
adversely affect our financial condition and results of operations.
Our fleet rotation program can be adversely affected by financial market conditions.
To meet the needs of our customers, U-Haul maintains a large fleet of rental equipment. Our rental truck fleet
rotation program is funded internally through operations and externally from debt and lease financing. Our ability to
fund our routine fleet rotation program could be adversely affected if financial market conditions limit the general
availability of external financing. This could lead to the Company operating trucks longer than initially planned and
reducing the size of the fleet, either of which could materially and negatively affect our results of operations.
We operate in a highly regulated industry and changes in existing regulations or violations of existing or future
regulations could have a material adverse effect on our operations and profitability.
Our truck and trailer rental business is subject to regulation by various federal, state and foreign governmental
entities. Specifically, the U.S. Department of Transportation and various state and federal agencies exercise broad
powers over our motor carrier operations, safety, and the generation, handling, storage, treatment and disposal of
waste materials. In addition, our storage business is also subject to federal, state and local laws and regulations
relating to environmental protection and human health and safety. The failure to adhere to these laws and regulations
may adversely affect our ability to sell or rent such property or to use the property as collateral for future
borrowings. Compliance with changing regulations could substantially impair real property and equipment
productivity and increase our costs.
Item 1B.
Unresolved Staff Comments
We have no unresolved staff comments at March 31, 2008.
Item 2.
Properties
The Company, through its legal subsidiaries, owns property, plant and equipment that are utilized in the
manufacture, repair and rental of U-Haul equipment and storage space, as well as providing office space for the
Company. Such facilities exist throughout the United States and Canada. The Company also manages storage
facilities owned by others. The Company operates nearly 1,450 U-Haul retail centers of which 495 are managed for
other owners, and operates 13 manufacturing and assembly facilities. We also operate over 250 fixed-site repair
facilities located throughout the United States and Canada. These facilities are used primarily for the benefit of our
Moving and Storage segment.
SAC Holdings owns property, plant and equipment that are utilized in the sale of moving supplies, rental of self-
storage rooms and U-Haul equipment. Such facilities exist throughout the United States and Canada. We manage the
storage facilities under property management agreements whereby the management fees are consistent with
management fees received by U-Haul for other properties owned by unrelated parties and previously managed by us.